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Logistics Workers Make Global Capitalism — and They Can Break It, Too

Katy Fox-Hodess

The logistics industry is key to the global circulation of goods under capitalism. Workers have immense power within it to grind that circulation to a halt — if they can get organized.

Shipping containers near Peoria, Illinois. RaGardner4 / Flickr

Interview by
Fabian Vugrin
Alexander Brentler

Over the past several decades, capitalism has broken up the production process into individual steps carried out in separate work sites scattered across the globe. As a result, logistics, the systems that organize the physical movement of goods through space and time, has become more central to global capitalism than ever, and that gives workers in the logistics sector — including ports, rail, trucking, and other industries — tremendous potential leverage over the capitalist class. Any attempt to think strategically about strengthening working-class power must therefore grapple with the sector and how it works.

Fabian Vugrin and Alexander Brentler from the German edition of Jacobin spoke with Katy Fox-Hodess, a sociologist and cofounder of the International Labour and Logistics Research Network, to discuss the possibilities.


FV

Does it make sense to speak of “logistics” as separate from “production”? If not, why?

KFH

In the simplest terms, you could say that in the past, you have a much higher degree of integration within given industries — meaning that in the past, more of the steps of the production process happened in a single location than they do today. What we see today is that in a typical manufacturing industry, the steps of the production process tend to be spread out across space to a much larger degree. Each time, there is a movement in space that implies a role for the logistics industry and for logistics workers in enacting that movement.

In the past, if we thought about logistics workers, we were thinking about transportation workers generally. We were typically thinking about the movement of finished commodities to markets. But now we’re thinking about multiple steps of the production process, which also involve movement before the finished commodity reaches the market.

FV

Logistics and logistics workers are crucial to keep global capitalism running. So what are the general working conditions, if there are any, in the sector compared to other sectors of the economy and even a typical worker?

KFH

In terms of whether there is a typical logistics worker, by far the most numerous are workers in warehousing and road transport. If we look at the other key sectors like shipping, ports, rail, air, these are really strategic sectors of the global logistics industry. But in terms of employment, the number of people employed in those sectors is much smaller than warehousing and road transport.

Why is this so? In the past, the numbers of people proportionately who are employed in shipping and ports and rail was much higher. In large part, this has to do with changes in technology and with the enormous economies of scale created through the rise of containerization and the ever greater size of the vessels carrying containers and other commodities.

But warehousing and road transport continue to be much more labor intensive. They still rely primarily on variable capital to make a profit.

As we move along global supply chains from ships to ports to rail to road and warehousing, we see the proportionate size of the workforce increasing. Container ships are bigger than ever. This means that in terms of the workforce, a single ship will carry thousands of containers with a relatively small number of people employed on the ship.

Because of the advanced technology used in ports, a very small number of people will unload or load an enormous number of containers. When we’re thinking about rail transport, a train will carry hundreds of containers. But when it comes to trucking, a truck driver will usually only transport one container. When that container gets to a warehouse, many workers will be involved in unpacking and distributing what’s contained in a single container. That’s why workers and logistics are so heavily concentrated in warehousing and road transport rather than in shipping, ports, and rail.

FV

What role did it “just-in-time production” and the global wage difference play in this process?

KFH

Just-in-time production is a central part of the story of what is called the “logistics revolution,” which means the rise of logistics as a central feature of capitalist strategies of accumulation. This has primarily taken place since the 1970s. In the past, when people talked about logistics, they were generally talking about military logistics. But in the post-war era, it increasingly drew the interest of the business world. The most famous example of this sort of shift from military to business has to do with containers. The use of the container was innovated by the US Army during the second world war.

Why did business become so interested in this? In the 1970s, there was a global economic recession, coupled with lower profitability rates for firms in the global north. This led these firms to pursue cost savings through outsourcing production to the global south, taking advantage of weaker regulatory regimes and also the lower cost of labor. Another factor was the growth of consumer markets as developmental states in the global south saw increases in the standard of living and increasing consumption. So you have both outsourcing of production on the one hand and the growth of these global consumer markets.

Both of these factors tended to produce an increase in the complexity and frequency of use of global supply chains. This in turn created logistical challenges for capital as well as a lot of opportunities in terms of cost savings and access to markets. But it also created a lot of opportunities for disruption. This is particularly a problem because at the same time that you see the rise of outsourcing from the global north, firms are trying to deal with a crisis of profitability.

We therefore see firms shifting in many sectors from a strategy of what’s called “push production” to a strategy of “pull production.” Push production is where firms push merchandise on consumers through forecasting and marketing. Firms study and then tell consumers what it is that they want to buy and push them to buy it.

From the 1970s onward, we see this shift to a strategy of pull production where firms utilize new technologies like barcodes, for example, to respond rapidly to consumer demand. And this becomes an important new basis for competitive advantage. This is very closely related to the rise of just-in-time production, in which firms aim to have their products in constant motion with as little shelf time as possible.

Time on the shelf, time sitting in a warehouse is money lost from the perspective of just-in-time production. Firms seek to have so-called seamless flows — products in constant motion without any bumps in the road along the way.

Taken together, all of these developments created the need for a global logistics industry to handle the movement of commodities at various stages of production around the world, moving them as quickly and as smoothly as possible. As more and more firms started to adopt these strategies of just-in-time production, pull production, outsourcing, etc., it had a knock on effect where other firms felt the pressure to follow suit.

AB

It is remarkable that a system built on such tight margins can be so resilient. You’d think this would all be very fragile. What would you say are the ingredients to make this miracle work?

KFH

I think there’s two things to say about this. The first thing to say is that a lot of the time or even most of the time, the system doesn’t live up to its promise of seamlessness. There are so many opportunities for things to go wrong in a system like this. And things often do go wrong. There are delays or bumps in the road all the time. So to some extent, this claim of seamless, smooth flows is really just hype from the world of management consultants.

On the other hand, the system as a whole does nevertheless function quite well for capital. One of the major reasons for this is the use of information technology. That’s a really important component of the rise of logistics. When we think of the technologies of logistics, we tend to think of material technologies like containerization. But the information technology side of it is just as important.

The rise of the Internet and instantaneous communication allows logistics firms to make adjustments very quickly and frequently. They are able to minimize as much as possible the potential for things to go wrong. The potential for delays is reduced by rerouting and redispatching. And of course in road transport, warehousing, and parcel delivery, so many of the technological advances have consisted of new ways to surveil and discipline the workforce.

FV

What role did the state play in the logistics revolution?

KFH

The state played a very important role in early innovations in containerization and the internet and other technologies which have been central to the logistics revolution. But there’s a broader state role in terms of global political economy, in terms of the rise of free trade agreements over the past several decades, for example, which is an important part of the story of why we have seen so much outsourcing of production.

The fact that these trade agreements do not include regulations to mitigate against negative externalities for the environment or to protect workers who are being highly exploited in other parts of the world is a deliberate decision by states. So we can think of the role of the state as much in terms of its absences, like decisions not to regulate, as well as its decisions to develop technologies or sign trade agreements.

AB

Organizing among logistics workers is sometimes seen as a missed opportunity for the left. Supposedly, logistics workers could exert a lot of pressure on the system, but the reality of labor struggle in this sector is much more mixed. What’s wrong with this oversimplified picture?

KFH

I think the emphasis should be on the fact that logistics workers potentially have a lot of structural power, but it still takes a lot of organizing to leverage that power.

We’ve been discussing the central role logistics plays in the strategies of accumulation of capital, which has become increasingly predominant over the past fifty years. But the potential power of workers in the industry also comes from the way that the logistics industry has been organized as a network of global supply chains that relies heavily on hubs, concentrations of infrastructure which can serve as potential choke points by organized labor. When we’re thinking of these hubs or choke points, typically we’re thinking of things like mega ports or large distribution centers. But there are other potential logistics choke points as well.

The power of logistics workers stems from the organization of production in the industry, from the geographic distribution and concentration of infrastructure, from the central role that these workers play in the global economy and in the accumulation of capital. But these are necessary but not sufficient conditions for logistics workers to exercise power.

So what are sufficient conditions for them to exercise power? Well, always there’s the question of organization. The question then becomes, what prevents logistics workers from organizing successfully as much as we might expect them to, given the potential for them to exercise power?

The answer that I have found through my research (and my research is on dockworkers, so it’s on one specific sector within logistics) is that the organization of logistics workers is not so different than the organization of other groups of workers across the economy in that it is highly dependent on social and political conditions, independent of the organization of production and the economy.

This is where issues like the legal regime for organizing, the enforcement of labor law, the repression of trade unionists by states or employers or extra state actors, the degree of political and social stability, whether you have tight labor markets and so on and so forth, really matter a lot.

What I found, particularly with dockworkers, is that the state is absolutely central. This is true across the logistics industry, but it’s really true for the ports, because ports are such strategic spaces for global capital. So decisions, for example, about whether ports are publicly owned or privately owned have a lot of bearing on the kind of leverage that workers have available to them in disputes.

We see this as well with, for example, the rail industry, where these questions of public versus private ownership tend to be very important. And the immense strategic power of workers like dockers and railway workers, for example, can have disadvantages as well as advantages.

The greater the potential ability of these groups of workers to disrupt the economy as a whole through work stoppages, the more likely it is that the state will intervene in ways that are restrictive of labor’s ability to act as an effective collective actor. And we see the state act quite repressively in many cases.

So we have this increasing reliance of global capitalism on a strategy of accumulation and growth through increasing the rate of circulation, which increases the vulnerability of capital when supply chains are disrupted. These vulnerabilities and disruptions create reverberations that go beyond particular hubs. So this is both the source of potential power for workers in terms of their relationship to capital, but it’s also a vulnerability for workers in terms of their relationship to the capitalist state.

This question of structural power is therefore a complicated one. And in my view, it’s just as important when we talk about structural power in the logistics sector to think about it in relation to the state as it is to think about it in relation to capital.

AB

So you’d go as far as to say that states take specific actions to be able to thwart this type of structural power? Like the decision to privatize particular ports or railways?

KFH

Absolutely. Decisions to privatize and decisions that restrict the power of workers in these sectors are crucial. Another really key example is the deregulation of the road transport industry, which happened in a very overt way in the United States. Truck drivers in the US were heavily unionized and had much better working conditions in the past than they do today. That is because of a single state decision to deregulate the industry. In a very short period of time, this resulted in the majority of truck drivers being reclassified as independent contractors without the rights that wage workers have.

The state is always important, regardless of which sector of the economy we’re talking about. But I think we see particularly overt, deliberate forms of state action to undermine the structural power of workers in the logistics industry more than we see it in other industries.

AB

What are the larger preconditions then of a successful integration for a logistics sector into a larger labor union movement? Like are there any positive examples from around the world for a winning strategy in the logistics sector and for alliances for logistics workers with the wider left?

KFH

It’s not a simple question to answer. I would cite a couple examples from my research of recent dockworker disputes from Chile and Portugal from the past ten years or so as good examples of integration into the larger labor movement.

Prior to the Pinochet dictatorship, the Chilean trade union movement was one of the strongest in Latin America, and there was a very high rate of unionization and a very militant, politically active union movement. That was before significant changes to labor laws during the dictatorship. In addition to the murder, imprisonment, and disappearance of hundreds of trade unionists, there was the shift from a system of sectoral level collective bargaining, which you have in northern Europe, to a system of sub-enterprise-level unionism with multiple unions competing for members within the same employer. The scale of collective bargaining and representation massively shifted.

This was really effective in impacting the power of trade unions. And this was true for dockworkers as much as for any other group of workers in Chile. Chilean dock workers are organized not even on a port-by-port basis, but within ports into separate unions. Each employer, each terminal operator at the port, will likely have more than one union — a system of total atomization and fragmentation. But nevertheless, the Chilean dockworkers have been remarkably successful over the past ten years. Their success has hinged on a few key factors.

The first is their organizational abilities. They understood that this fragmentation was a disadvantage. And they began organizing together at first at the port level and at the regional level, and then at the national level in an organization called the Unión Portuaria, which is not a legally recognized union, but an association of unions that act together. And through organizing this way, they built toward national strikes in 2013 and 2014.

Each year they had nearly monthlong national strikes at a key period for the export of reverse-season fruits and vegetables, and they made sure to secure ports that play a particularly important role in the country’s export economy, such as the Port of Angamos in Mejillones, which exports copper, the country’s most valuable export commodity which remains in public ownership.

They were very strategic in terms of their demands. There were a few issues, including repression of trade unionists, but also unpaid lunch breaks. But the leadership of the union understood that the biggest, most significant victory in the long term wasn’t winning simply the money that workers were owed, but would be in terms of forcing the employers to bargain as a unit with the national Union Portuaria and forcing the state to play a role as the kind of mediating party.

So in effect, through these strikes, the Chilean dockworkers forced the Chilean state to reestablish a precedent for tripartite, sectoral-level collective bargaining for the first time since before the dictatorship. This is not something that exists in law. This is something that they forced through de facto through their strike action.

Part of why they were successful is that their leadership has very close ties to key actors on the Left in Chile. In particular, the student movement, but also other trade unionists in key sectors, have become really key players in the mass protests in Chile over the past year and a half and in protesting in favor of a public pension system and so on.

The dockworkers really established a reputation for themselves on the Left. They have established really meaningful relationships with actors on the Left, and this has helped them to amplify their message and to make it more difficult for the state to isolate and repress them. Because one of the problems when dockers go on strike, and this is a problem for transportation workers like railway workers as well, is that the public feels the impacts of this directly. This gives states and employers an opportunity to demonize these workers. So having this layer of social support is a really important counterbalance to that potential for demonization and repression.

The Chilean dockworkers are also heavily involved in an international organization of dock workers, the International Dockworkers Council, who threatened a blockade of ships from Chile at a key moment in the dispute. That was really effective. All of these elements together have helped the Chilean dockworkers to become a major force in the Chilean trade union movement. They have made some really important gains, not just from their members, but in terms of establishing some new benchmarks for Chilean workers as a whole.

One key lesson in all of this is unity. There’s no way to get around organizing. Unity is really important. When we’re thinking about logistics workers, because of the networked nature of production, it’s really important to think about unity not just in a specific worksite, but across work sites and even internationally.

I think another lesson there is that despite the structural power of these workers, they saw how important it was to not just rely on their structural power alone, but to build forms of societal power through making alliances with other social movements, with other political actors, precisely because they understood how important the role of the state was in an industrial dispute that had much wider implications for the economy and society.

AB

So the key property of these networked systems is that they can cope with localized disruptions very well, it really takes a system wide shock to really disrupt them and in a serious way? Was that what Chilean dockworkers were able to achieve with their more nationalized strategy?

KFH

Absolutely. That was exactly the reason that they had to do that, even in terms of organizing at the regional level, because before what would happen was workers at one terminal or one port would go on strike and the ships would just simply be diverted to another port, just up the coast, in which case, the leverage is totally diminished. So it was only by unifying regionally and nationally and saying “None of us are going to accept diverted cargo!” that they were able to win.

They even had their international allies saying we’re not going to accept Chilean ships. That’s where the leverage is. Unity of workers across multiple worksites is absolutely critical in the logistics industry in a way that it just isn’t in many other industries.

FV

A lot of people have become newly aware of the importance of the logistics sector through COVID-19, through the accident at the Suez Canal, and so forth. How likely is it that we’re going to see a re-regionalization, if not renationalization, of supply chains?

KFH

There’s a lot of discussion about this currently, but I think it is too early to know how it’s going to play out. In the UK, there’s some evidence that employers are beginning to diversify their supply chains more in order to better manage uncertainty, though, of course, this is different than insourcing production.

It’s important when we talk about rethinking global supply chains to think about this not just as a reaction to disruptions, but in terms of climate change. These global supply chains have an enormous carbon footprint, and they often work in totally illogical ways from the perspective of human thriving or the environment. Decisions often only make sense in terms of the bottom line.

A classic example of this is in fisheries. Fish can be caught on one side of the world, transported to the other side of the world (because labor is cheaper) to sort and prepare the fish and process it in canneries, and then taken across the world once again to consumer markets. From any other perspective then capital’s bottom line, this just doesn’t make any sense at all.

In rethinking global supply chains, we should keep this bigger picture in mind. It’s not just about inconvenience to capital, inconvenience to consumers in terms of disruption, but it’s a much bigger question about how we’ve organized production and consumption in the global economy and whether this is really the  best of all possible worlds, which I would certainly argue it is not.

AB

Do you think logistics workers could be at the center of demands for decommodification or taking things into a public ownership? Infrastructural networks that are the most obvious starting points for that.

KFH

Yes, I think the UK is a great example of that. The RMT, the main rail workers union, is a very left-wing, militant union. They have been leading the campaign for renationalization of the railway system in Britain for years. It’s a very popular public issue. In Greece, dockworkers were fighting — unfortunately, unsuccessfully — the privatization of the port as a result of the austerity regime and the requirements of the memorandum with the troika. But they were absolutely leading that fight to keep the ports public. I think not only is it possible, but we see many concrete examples of this sort of thing.

FV

Can you tell us a bit more about international solidarity and coordination among dockworkers unions?

KFH

There are global union organizations that seek to represent workers across the sector. The more mainstream organization is the International Transport Workers Federation, which affiliates unions across the transportation sector, while the organization that I study, the International Dockworkers Council, just represents dock workers. It is an interesting organization because it grew out of some disappointments that dock workers had with the way that the International Transport Workers Federation had handled some iconic dock worker disputes in the 1990s in the Port of Liverpool in the UK and the Port of Charleston in the US.

Dock workers in the IDC argued that the basic problem was the ITF model of global unionism was overly bureaucratic and that this was preventing the ITF from being as effective as the workers needed it to be. So they formed the IDC in 2000. It has two decades of experience as a rank-and-file-based organization that has little bureaucracy, just one staff member. The organization has tended to run more like a sort of international stewards council, where workers are sharing information and devising strategies together and providing concrete industrial support in terms of mutual aid and particularly refusing to handle cargo during disputes and solidarity. That’s been really effective. They’ve worked through many other channels, legislatively, putting pressure on governments and on all sorts of things. I think it’s a really great example of the kinds of things that are possible in terms of international organization of workers in the logistics industry.

AB

What is the potential for logistics workers to be part of a wider coalition for working-class power?

KFH

The potential is definitely there. Particularly in the sector that I study in ports, this is really evident. Some of the most significant general strikes historically started in ports, such as the 1889 London dock strike, the 1934 San Francisco general strike, and so on. These strikes provided a major boost to the labor movements in both countries and there are many other examples, up to the present.

In terms of what has enabled this sort of thing, the key here is meaningful two-way coalitions between trade unionists and political activists. This does not work well when we see opportunism or tokenism, either on the side of trade unionists or political activists. But when there is deeply rooted, meaningful politicization and understanding between trade unionists and political activists, there is an opportunity for using strikes in these strategic sectors to bring about broader political change.

I’m originally from Berkeley, California. And next to Berkeley is the city of Oakland, which is has a very large port with a history of radicalism in the local trade union, the International Longshore and Warehouse Union (ILWU), which historically has been one of the most left-wing unions in the United States, particularly this branch of the union in Oakland. This goes back to the 1930s.

In the ILWU, but also when we look at left-wing dock workers in Europe, there’s a history of participation in the anti-apartheid struggle, in protesting the wars in Vietnam and Algeria, in supporting the civil rights movement in the United States and solidarity with Chile. London dockworkers refused to ship arms that would have been used in the aftermath of the Russian Revolution to crush the Red Army during the Civil War.

Much more recently, just in the past decades, again, in Oakland, California, dockers took action against the wars in Afghanistan and Iraq, for Black Lives Matter, in support of the Occupy movement and in support of Palestinian liberation. In the past couple of years, we’ve seen really fantastic examples in Europe of dock workers taking action against the war in Yemen, protesting the shipment of arms to Saudi Arabia. So there’s a long and very beautiful history of this.

People on the Left should take a lot of inspiration from this and understand that these things are possible. And they come about through building these relationships as trade unionists, as political activists.

Now, of course, things can go in the other direction. It’s not always the case that trade unionists become politicized on the Left. For example, truck drivers in Chile before the coup d’etat in 1973 who, probably through funding from the CIA, stopped work in protest of Salvador Allende’s socialist government, creating artificial shortages, which were a precipitating factor for the coup. Also CIA support, for example, for Force Ouvrière, the French Union in the post-war period that undermined the power of the left-wing CGT dockers in Marseilles and elsewhere who were opposed to French imperialism.

So it’s not the case that trade unionists will automatically become politicized or automatically become politicized as part of the Left. But there is clearly this potential, and there are amazing examples from across the history of the twentieth and twenty-first centuries. We should take this as inspiration and learn from them and build on them.